Blue Cross Cutting 184 Jobs in Group Services

Blue Cross of California said Friday that it will trim 184 jobs in its group services division in Oakland over the next year but will transfer 25 of them to Sacramento.

The health insurer, which moved its headquarters to Woodland Hills early this year, said the cutback stems from eliminating an inefficient claims-processing system. Twenty-five customer service jobs will be moved to Sacramento to handle the anticipated increase in work there, said John Cole, who heads the Oakland division.

Because the jobs will be eliminated over 11 months, attrition will likely reduce the number of actual layoffs, spokeswoman Jeanette M. Hartman said.

The company, which celebrated its 50th anniversary this year and insures 58,000 individual policyholders and 2.5 million participants in group medical policies statewide, has been struggling to bring fast-rising loss claims under control. Just last month, it announced an increase in deductibles for individual policies and said it will raise group premiums by an average of 15% to 20% as policies come up for renewal. “We’ve experienced a substantial increase in costs in the last few months,” Cole said at the time, explaining:

“Practitioners are charging more. There’s more utilization of their services. People are going to the hospital and staying longer than (they did) just six months ago. And every day there are new drugs, new machines, new technologies, and they all cost money.”

Cole said that laid-off employees will be offered severance pay based on service and that their medical benefits would be continued for several months.

The Oakland Private Industry Council also will offer job counseling and some retraining, he said.

Blue Cross, which formerly had separate operations in Northern and Southern California, consolidated operations statewide five years ago with headquarters then in Oakland.